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A-B Just Can't Quit Bud Select

Brand Is Tanking Fast, but Brewer Has Invested too Much to Simply Ax It

What's a marketer to do if a major product launch falls flat despite all the advantages: the pedigree of the category's leading player, an unbeatable distribution system, clever advertising and a massive $170 million, two-year media outlay? In the case of Anheuser-Busch, it's more a question of what you don't do: walk away.
A-B execs acknowledge that Select's marketing has fallen prey to the same vague positioning that felled past brand extensions Bud Dry and Bud Ice.
Sales of Budweiser Select have tanked in supermarkets and convenience stores, tumbling about 20% so far this year, according to data from ACNielsen and Information Resources Inc.

That follows overall sales declines in the mid- to high teens during the second, third and fourth quarters of 2006. Last year, Select sales dropped 7.6% overall even though the comparison is uneven because the brand didn't launch until March 2005.

Cloudy brew
But the St. Louis brewer has committed too much to the brand -- including its cherished Budweiser brand name and CEO August Busch IV, who stars in ads for Select, to give up.

A-B executives made that clear at the brewer's distributor conference in New Orleans last week, drawing parallels between the early struggles of Select and Bud Light (now the largest beer brand in the world) and vowing to keep media spending constant with the past two years. They did acknowledge, however, that the brand's marketing has fallen prey to the same vague positioning that felled past brand extensions Bud Dry and Bud Ice, a pitfall A-B execs earlier vowed to avoid.

"There's no doubt the future creative is going to have a sharper message about what the brand is," said one conference attendee.

Still, getting A-B distributors -- who recently were given InBev's import portfolio to push alongside Bud Light and other staples -- to focus on a slumping, unproven brand could be a problem. "With so much stuff to push, it's hard to make people focus on a brand that's not inherently being pulled off the shelves."

'Crowntown' and Jay-Z
Though A-B erred in its pricing and other strategies, Bud Select has been credited with distinctive advertising centered on its edgy rendition of the Budweiser crown logo, a branded viral video called "Crowntown" that drew more than 1 million views on YouTube and a clever partnership with rapper Jay-Z, dubbed Select's co-brand director. (Advertising is handled by DDB, Chicago, and Cannonball, St. Louis). The brand ranks as the U.S.'s 15th-largest beer.

In a statement, Bud Select Brand Director Rudy Beltran said the product is among the top 10 selling A-B brands, noting that shows its marketing is "clicking with young adult professionals." (Select is A-B's eighth-largest brand, according to Beer Marketer's Insights, behind such offerings as Busch Light and Natural Light). He added: "There are no plans for adjustments in the brand's positioning."

Wholesalers howl
For starters, they said, the marketer should explain what the brand is, not just who it's aimed at. "Most people didn't know what Ice or Dry meant, and they don't know what Select means either," said analyst Manny Goldman.

Indeed, A-B developed Select during the low-carb craze, but, since that fad had passed by the time the beer reached market, opted instead to tout the beer's lack of aftertaste. Wholesalers howled that the pitch implied their other beers tasted lousy. An early ad was scrapped, and the nondescript tagline "Expect Everything" emerged.

"They lacked the courage to forcefully explain the product," said Tom Pirko, beverage-marketing consultant. The botched execution undermined A-B's correct instinct to launch an upscale light beer, he said, as smaller-scale launches of upscale light brands such as Heineken Premium Light, Sam Adams Light and A-B's own Michelob Ultra have generally been met with more success.